NSW may prosecute CSG miner over leak

A coal seam gas miner could face prosecution after failing to alert authorities to a saline water leak in northwest NSW last year.

It's been revealed that 10,000 litres of saline water leaked in June 2011 at the Narrabri Coal Seam Gas Project, which was operated at the time by Eastern Star Gas.

The incident south of Narrabri was not reported by Eastern Star Gas, despite its obligation to do so under the conditions of its Petroleum Exploration Licence.

Santos took over Eastern Star Gas in November, and a subsequent review of its records identified the pipeline failure.

Santos brought the discharge to the attention of the NSW Department of Trade and Investment last Friday.

At the time of the incident, Eastern Star Gas was conducting CSG exploration within the Pilliga East and Bibblewindi State Forests.

The DTI is pursuing enforcement actions on the discharge, including possible prosecution, and continuing to work with the Environment Protection Authority to further investigate the incident.

NSW Greens mining spokesman Jeremy Buckingham has called for a moratorium on CSG exploration across the state.

"This industry is clearly not safe and continues to be shown to be failing to meet its legal obligations," he said in a statement.

In December last year Santos denied reports that a leak at the Pilliga State Forest was killing local trees.

"They are using the tried and tested model of deny, deny, deny and then when forced by overwhelming evidence into a mea culpa they claim to be co-operating with the authorities," Mr Buckingham said.

The Nature Conservation Council of NSW CEO Pepe Clarke said the discharge confirmed the group's belief that government regulators were struggling to police the industry.

"The site of NSW's largest coal seam gas field proposal has been plagued by severe environmental impacts, poor regulation and a lack of compliance with even weak rules during the exploration phase," he said in a statement.

Santos said it would continue to assist the government's investigation.

"Upon the conclusion of the investigation Santos will work with the government and Forestry NSW to ensure the area impacted is fully remediated," the company said in a statement.

The mining giant has been given permission to access land in NSW's Pilliga State Forest for up to 30 years, with a view to mining CSG.

The company, which is currently at the exploratory phase in the area, will need to submit a successful application to the NSW Department of Trade and Investment before it can mine.